Retirement

Toughest States for Retirees

Kelly Miller, AARP, Updated January 2011

En español | Choosing where to live after retirement is a huge decision — and a very personal one. A low cost of living is a priority for some, while being close to family takes precedence for others regardless of the cost. As you plan for retirement, one smart way to identify the best place to retire for you is to eliminate the places that don't meet your needs.

Places to retire

Toward that end, TopRetirements.com, a website that provides information on retirement communities, has issued its list of the 10 worst states for retirement. The list is subjective, of course, but it's a good starting point for research. Factor in your personal retirement preferences as your review the rationale for why each of these states landed in the bottom 10.

In compiling its list, TopRetirements.com gave the most weight to three criteria: taxes, fiscal health and climate. Each of these factors is important, generally speaking, to retirees. On the financial front, high taxes can eat away at limited incomes, while poor fiscal health can force state governments to raise revenue or cut services. A warm climate is a natural draw for many retirees. If those three criteria aren't among your top priorities, then the low rankings might not influence your decision.

Here are the 10 worst states for retirement, with No. 1 being the lowest ranked, according to TopRetirements.com:

Worst States for Retirement

Why You Should Think Twice

1) Illinois

Poor fiscal health

2) California

Expensive, and its finances are in disarray

3) New York

Very high taxes, including property taxes

4) Rhode Island

Worst-off state in the Northeast from a financial viewpoint; high taxes

5) New Jersey

Highest property taxes in the United States; has pension funding issues

6) Ohio

High unemployment and cold winters

7) Wisconsin

High property taxes and frigid weather

8) Massachusetts

High cost of living and high property taxes

9) Connecticut

Taxes Social Security and has high property taxes

10) Nevada

Foreclosure capital of the world

AARP Discounts

Visit TopRetirements.com for more details on why it ranked each state as low as it did. The information can be illuminating. Illinois, for example, is under such dire financial stress that it was forced to borrow money to fund its pension obligations. The state, however, doesn't tax retirees' Social Security income, which is a plus. The cold winters are inescapable.

You can also compare TopRetirements.com's choices to a similar list of the 10 worst-rated states for retirement that was compiled by Money-Rates.com, a finance website. Illinois didn't even make Money-Rates.com's list, which was topped instead by Nevada. Money-Rates.com gave significant weight to crime and unemployment rates.

In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at
www.aarp.org/volunteer